Discussion Paper

The empirical and analytical research we produce is based on independent study or the work of research groups within the Institute. We consult and collaborate with a wide range of partners, with the goal of to deepening research and enriching policy debates in the future. The views expressed in the papers we publish are those of the authors and do not necessarily represent those of APIR.

Discussion Papers

ABSTRACT

This paper provides an early assessment of the effects of the negative interest rate policy (NIRP) introduced by the Bank of Japan in January 2016. We find that the NIRP has effectively stimulated private residential investment, and by lowering long-term interest rates, has likely also supported private nonresidential investment. There is also reason to believe the policy has likely halted the appreciation of the yen and arrested the downward trend in Japanese stock prices around August 2016. Overall, we find that the NIRP has had expansionary effects on the Japanese economy, and therefore serves as a legitimate policy tool in alleviating Japan’s zero-interest rate lower bound, notwithstanding some potential negative side effects.

Discussion Papers

Discussion Paper » Discussion Paper

/ DATE : 2016-12-01

AUTHOR : CAO, Thi Khanh Nguyet

ABSTRACT

This paper aims to find the answers to the question: “Which factors are important in determining whether SMEs access the formal credit market, and what determines SMEs’ satisfaction levels after applying for formal credit?”. By using a survey of Vietnamese SMEs conducted from 2005 to 2013, this study provides a wider view and presents new evidence regarding determinants of access to formal credit before and after the global crisis in 2008. The study outlines the process, from applying for a formal loan to being satisfied with that loan. Three empirical models have been devised based on the decision processes: the application stage, the approval stage, and the satisfaction stage. The empirical results show that banking relationships and the business environment were important factors when applying for formal credit as well as in credit obtainment. However, positive measures of firms’ performance, such as high return on assets scores and sales growth, did not have a significant influence on whether firms obtained credit. Furthermore, Vietnamese formal financial institutions were found to depend too much on collateral assets in assessing whether to supply credit.

Discussion Papers

Discussion Paper » Discussion Paper

/ DATE : 2016-09-13

AUTHOR : HAYASHI, Toshihiko

ABSTRACT

This paper introduces a simple macroeconomic time series model incorporating a key concept of GDP elasticity with respect to population (population elasticity). Using this model, we conducted empirical analyses of 158 countries each covering 25 to 180 years of history. As a result, we found first that the estimated population elasticity demarcated the countries according to regime, showing clearly whether a country was in the ‘Malthusian regime’, in the ‘modern growth regime’ or in the ‘postmodern regime’. We found that the poorest countries as well as some oil-rich countries were in the Malthusian regime. The modern growth regime prevailed in most European, Asian and American countries in the 20th century. We then predicted long-term real GDP for each country while they stayed in modern growth regimes. Third, we observed that both Germany and Japan went into a postmodern regime after a demographic transformation. Focusing on Japan, we argued that if the nation remained in the modern growth regime, it would face a precipitous decline in GDP. We suggested that Japan must reduce dependence on population as a source of growth in the postmodern era. This lesson might be important for the two thirds of countries in the world that are expected to enter a postmodern regime around the middle of this century.

Discussion Papers

ABSTRACT

The landscape of international development has changed dramatically, with a rise of emerging economies, more diverse actors of development cooperation, and intensifying aid competition. Moreover, Japan itself stands at a major turning point. There is a new wave of ‘internationalization’ of Japanese manufacturing FDI involving SMEs, which necessitates building much deeper and co-creative partnerships with Asia. The latest revision of the 2003 ODA Charter and the formulation of the new Development Cooperation Charter by the Japanese government can be understood as an attempt to respond to such changes. This paper stresses the four principles of Japan’s contribution to international development in a new era—i.e., a quality and knowledge leader, a people-centered approach, a solution-provider, and network-based cooperation. It then proposes three sets of enhanced partnerships with Asia: (i) manufacturing (monozukuri) partnership, (ii) city development (toshizukuri) partnership, and (iii) knowledge (chiteki) partnership. Japan should create a global strategy that increases its soft power, making full use of the intellectual assets and expertise as well as the human networks accumulated in Japan and abroad, building on its sixty-year ODA cooperation. ‘Co-creative’ partnerships with Asia should be central to this global strategy.

Discussion Papers

Discussion Paper » Discussion Paper

/ DATE : 2015-12-22

AUTHOR : HAYASHI, Toshihiko

ABSTRACT

This paper reports results from a cross country econometric analyses over 150 countries pertaining to possible correlation between per capita GDP and democracy, corruption, globalization and human development indices. Our findings include 1) of the four indices, the human development index has the strongest influence on per capita GDP and its growth, 2) fighting corruption pays as higher levels of cleanliness and transparency tend to raise per capita GDP, but less so in lower income economies, 3) the globalization index does not show any significant correlation with per capita GDP, and 4) the democracy index is not significantly correlated with per capita GDP or growth. but in some country it can hinder growth. The moral of our investigation is that economic growth does not automatically lead to better democracy, and higher per capita income does not warrant higher level of democracy. Democracy is not a means to higher income, but rather, it is an independent value in itself.

Discussion Papers

Discussion Paper » Discussion Paper

/ DATE : 2014-09-18

AUTHOR : TIUSONCO, Jose II Opalalic / HAYASHI, Toshihiko

ABSTRACT

Saddled with internal problems and external shocks the past three decades (1980 to 2010), the Philippines is back on its feet and getting ready to be fully integrated into Asia’s regional economy with better institutional and governance quality, focused public sector investments in infrastructure and human capital development, and armed with sustainable and dynamic labor force. It has achieved positive changes – significant progress – in governance and economic performance in recent years. It appears to be on track in addressing the critical development constraints to growth and poverty reduction through its inclusive growth agenda.Noted for its English-speaking, young and mobile human capital, the Philippines has been a services- and consumption-driven economy with significant contributions from remittances of overseas Filipino workers and the information technology-business process management (IT-BPM). However, its economy-wide productivity growth lagged and foreign investments stagnated for about three decades – between 1980 and 2009.Human capital is seen as among the strongest assets of the Philippines. Bringing in foreign –and domestic – capital investments are necessary in transforming human capital into productive labor, thereby creating an enduring economic growth structure and poverty reduction. Private investments are critical in addressing key challenges and opportunities on i) persistent problem of unemployment and underemployment, ii) reviving the manufacturing sub-sector, and iii) improving technological innovation and production capability.Sustaining and scaling-up institutional reforms are necessary in getting out of the “middle income trap” and ultimately achieving prosperity. This is not going to be easy; and, yes, leadership and good governance are key factors towards this end.

Discussion Papers

Discussion Paper » Discussion Paper

/ DATE : 2014-03-25

AUTHOR : BRADY, James

ABSTRACT

As the second-tallest Japanese prime minister in the modern era, Prime MinisterShinzo Abe stood tall among other world leaders in the “family photo” at the recent 2013 G8Summit, held at Lough Erne in Northern Ireland. The image seemed somehow symbolic ofthe fact that Japan has enjoyed an increased prominence in the global economy this year, asthe effects of the new LDP administration’s bold economic stimulus programme have startedto take hold. The summit trip was part of a tour of European capitals which gave Mr. Abe thechance to make the case for Abenomics in person, and to seek to boost Japan’s trade andinvestment relations with the EU in a number of areas. This discussion paper looks at howAbenomics is raising Japan’s profile in Europe, and considers the economic goals of this trip– in particular, the goal of doubling Japan-bound FDI – and the likely effects of the “threearrows” in achieving these goals.